Despite incredible resilience in the sector, a few producers have acknowledged the effects of a cooling global economy, particularly in China. The latest victim was British luxury-maker Burberry, which saw its shares fall more than 20% on Tuesday after noting same-store sales stayed flat in the last quarter; while management tried claimed they were facing a “broad-based” problem, CFO Stacey Cartwright admitted “China is a significant contributor to the decline.”

It comes as no surprise to anyone following global markets that China is slowing down, along with most of the global economy. Economic indicators for August revealed a deceleration in industrial production, a tick down in nominal fixed investment, and a negligible increase in nominal retail sales (below inflation); imports for consumption dropped 7.5% in August, indicating a significant weakening in domestic demand, Nomura’s economic research team explained.

China’s explosive growth, along with the rest of Asia and many of the so-called emerging markets around the world, helped luxury brands buck the trend and perform well despite the troubles facing the global economy. Burberry, for example, was up 10.6% to Monday’s close in 2012, before disclosing its latest sales numbers.

On Tuesday, the iconic British brand revealed that its retail sales at constant exchange rates grew only 6% in the ten weeks to September 8. More troubling, same-store sales showed no growth, meaning all of the 6% they saw came from new space. “Burberry currently expects adjusted profit before tax for the twelve months to 31 March 2013 to be around the lower end of market expectations,” read the release; the FT put those expectations between £407 and £455 million ($653 million and $730 million).

Burberry’s Chairman, John Peace, had already warned in their latest annual report that “China is slowing, some Eurozone countries will see recession, and the U.S. recovery is gradual.” His comments were echoed by CFO Cartwright, who acknowledged that Asian revenues were hurting do to a slowdown in gift giving, according to Trade the News.

Cartwright emphasized that the problem was not Burberry’s alone, but “broader based.” Despite a recent bullish update by France’s Hermes, investors reacted to Burberry’s report by cutting their exposure to other luxury names. In the U.S., Coach and Tiffany’s tumbled, while other companies in the apparel business with exposure to China, like Nike, also suffered. In Europe, luxury names like LVMH Moet Hennessy Louis Vuitton and PPR also fell. Interestingly, firms with heavy exposure to Chinese domestic demand, but not in the luxury sector, Starbucks and Yum Brands rallied on Tuesday.

China’s economic output has clearly been on a downtrend as of late, with GDP expected to slow to 7.7% in the third quarter, according to Nomura. China is in the middle of a political transition, with a once-in-a-decade change in leadership expected toward the end of the year. President Hu Jintao has already announced a series of fiscal stimulus measures, which Nomura estimates will be worth one trillion RMB ($158 billion) or 2.1% of GDP. The economists also expect further monetary easing via two reserve ratio requirement cuts, which all together should help the Chinese economy rebound strongly in the fourth quarter; they forecast 8.8% annualized growth in Q4.

If Burberry’s troubles are a direct consequence of cooling domestic demand in the world’s second largest economy, then there may be hope that the company will see increased activity toward the end of the year. But Nomura’s view is by no means mainstream, Barclays’ economics research team, for example, cut its full year growth rate from 7.9% to 7.5% and expects GDP growth below 8% has become the new normal. If China’s problems are deeper than Nomura’s analysts expect, or if Burberry’s shortfalls extend beyond their exposure to China, there may be further downside for the luxury retailer.